BUAD 250A Sample Midterm 2 - Four versions of each problem...

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Four versions of each problem are shown here. Writing space has been condensed for more efficient copying of these documents. Merle Hopkins Two-Year Accounting Cycle: [051M1.1a] Similar requirements are shown on each page related to the data presented there. SAMPLE ONLY Formation: The USC Corporation was formed on January 31, Year 1 when two owners each invested $40,000 in the firm. The firm provides consulting services to its clients and began operations on March 1, Year 1. Workspace____________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ For related accounts show proper balances that would appear in USC’s balance sheet at Dec. 31, Year 2. Required: Show the changes in these related accounts that would appear in USC’s balance sheet dated Dec. 31, Year 1. SPECIFY INCREASE OR DECREASE. Account in the Owners' Equity Contributed section of the balance sheet Capital $+80,000 _ dated 12/31/Year 1: [Completed for you ] Continued on the next page. Two-Year Accounting Cycle (continued): [051M1.1a] Notes Payable: On January 31, Year 1, one of the owners lent $50,000 to the firm. $5,000 interest will be due when the principal is repaid on January 31, Year 2.
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On January 31, Year 2, the interest and principal were paid in full when due. Workspace _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ _____________________________________________________________ Required: Show the changes in these related accounts that would appear in USC’s balance sheet dated Dec. 31, Year 1, as well as in the income statements for the years ending Dec. 31, Year 1 and Year 2. SPECIFY INCREASE OR DECREASE. Account in the Liability Notes section of the balance sheet Payable $_______ dated 12/31/Year 1: Account in the Expense Interest section of the income statement Expense $_______ for the year ended 12/31/Year 1: Account in the Expense Interest section of the income statement Expense $_______ for the year ended 12/31/Year 2: Continued on the next page. Two-Year Accounting Cycle (continued): [051M1.1a] Services to Clients: In Year 1, the firm provided $380,000 services to Client#1 while collecting $210,000 for services rendered to that client. Client#2 opted to pay USC $130,000 on December 31, Year 1 for work that would not be started until Year 2. In Year 2, the firm provided $640,000 in services to Client#2 including all of the services for which payment had been received in Year 1. Client#2 paid USC Corporation $440,000 cash in Year 2. Client#1 paid in full the amount owed from services performed for it in Year 1. Workspace _____________________________________________________________ Required: Show the changes in these related accounts that would appear in USC’s balance sheets dated Dec. 31, Years 1 and 2, as well as in the income statements for the years ending Dec. 31, Year 1 and Year 2. SPECIFY INCREASE OR DECREASE.
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Accounts in the Asset Cash $_______ section of the balance sheet Accounts dated 12/31/Year 1: Receivable $_______ Account in the Liability section of the balance sheet Unearned dated 12/31/Year 1: Revenues $_______ Account in the Revenue section of the income statement Consulting for the year ended 12/31/Year 1: Revenues $_______ Accounts in the Asset Cash $_______ section of the balance sheet Accounts dated 12/31/Year 2: Receivable $_______ Account in the Liability section of the balance sheet Unearned dated 12/31/Year 2: Revenues $_______ Account in the Revenue section of the income statement Consulting for the year ended 12/31/Year 2:
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